Earlier this week, Pfizer announced the failure of the first Phase III trial of the anti-amyloid antibody bapineuzumab — “bapi” for short — as a treatment for Alzheimer’s disease. Pfizer announced the news unilaterally, without partners Elan and Johnson & Johnson, which suggests that the syndicate disagreed about how and when to communicate the data. Nonetheless, the press release clearly implies that even the industry’s best statistical pickaxes couldn’t unearth a “spin-able” result. I expect bapi’s remaining pivotal studies, as well as those conducted by Eli Lilly — the company is conducting Phase III trials of a similar drug, called solanezumab — will fail over the next few months.

I have been a professional investor focused on healthcare for 15 years. In 2008, when investor excitement about bapi drove Elan to a $17 billion market capitalization, I was nearly alone in my skepticism. As any short seller can tell you, it’s incredibly difficult to be the only bear in the room as the stock soars.

Fortunately for me, the bulls were wrong. Almost exactly four years ago, bapi’s Phase II studies flopped, Elan shares plunged, and investors forgot about the drug.

Yet instead of discontinuing development or testing any new, post hoc hypotheses in small prospective studies, Elan and Wyeth — not yet part of Pfizer — made a mind boggling “go” decision later that year. Despite an extremely inconsistent Phase II dataset, the companies initiated a series of massive pivotal trials, which enrolled more than 4,100 patients worldwide. (Although Pfizer continued the Phase III studies after the Wyeth merger, management should be commended for at least foisting half of the development risk onto Johnson & Johnson.)

After a few years and at least $500 million in incremental R&D spending, Wall Street bulls began whispering enticing phoenix-from-the-ashes tales as bapi’s Phase III data approached. Some investors took the bait again, buying for a second time into the faulty “if the drug works, it will be huge” mentality. Even after this week’s failure, several Street analysts still believe bapi might work in one of the remaining Phase III trials. (The failed study tested patients with an unfavorable genetic mutation, called ApoE4. Two of the four pivotal trials enrolled patients without the ApoE4 allele.)

Unfortunately, wishful thinking doesn’t make a drug effective. Bapi is no exception.

Everyone loves a good pat on the back, but the goal of my first Forbes column is not self-congratulatory. Instead, I want to use bapi’s rise and fall as a proxy to discuss the surfeit of unwarranted optimism that plagues the healthcare industry.

In healthcare, audacity too often belongs to the skeptics, rather than to the hopeful. Few openly vote against new medical technology, whether by shorting or avoiding the stock, denying additional R&D outlays, or putting skeptical pen to paper. This unwillingness to suspend belief leads to misdirected frustration — at the FDA or investors short the relevant stock — and misaligned R&D spending.

The motivations for this excess optimism vary depending on the constituent. Investors dream of the biotech stock that rapidly quadruples and yields a vast fortune. Executives lust for the double reward of soaring options and cured patients. The media craves the humanity of medicine — the innocent child cured of a rare cancer, the heart attack patient saved by a stent, and even the gossip-fueled indulgences of cosmetic surgery — because it makes for compelling stories.

Yet these superficial explanations obscure a deeper reason for this persistent hopefulness. As inexorable participants in the system — patients of the past, present, or future — we all yearn for solutions to forestall our bodies’ inevitable betrayal or revolt.

My Forbes blog — The Pill and the Prick — will take an unvarnished look at every area of healthcare, both therapeutics (the pill) and services (the prick). My goal is to be thought provoking, fair, and unwaveringly honest.

Skeptics are often lambasted for being insensitive or, at worst, inhuman. I’ve often heard even the most seasoned investors counter a bearish view with a schoolyard-like retort — “What if your parent had this disease?” So let me be clear. I don’t rejoice at anyone developing Alzheimer’s disease. Brilliant family friends have deteriorated precipitously before my eyes. I know firsthand the consequences of this horrible disease and have tremendous empathy for patients’ suffering.

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As an investor like myself, the biotech arena is difficult to get a grasp of. Revenue’s are all built around the FDA approval model. Thus, small biotechs are in sense gambling on the likely hood of promising data through each phase. However, I completely disagree with your statement on anti-amyloid antibody. There has been many scan images and publications from multiple academia as well as Pharma on how amyloid therapy helps fight age-related macular degeneration. I believe a small molecule approach is the next best idea here. With a small molecule approach pharma can use a longer time line to treat patients because the cost is cut by 90% per year.